TO CATCH A THEIF

TO CATCH A THEIF

For business owners, identifying payroll fraud and then being able to collect the necessary evidence to be able to stop this from continuing is about putting checks and measures in place…

One of the biggest tips for small business owners is to become suspicious if a member of your payroll department never goes on leave, arrives early and leaves late. This should raise a red flag as this person may be taking steps to ensure that nobody else does their job and cannot discover their crime, Yolande Schoultz, Risk and Fraud Management Division Manager at Sage HR & Payroll, recommends putting the following measures in place:

1 Proper separation of duties

One effective way to mitigate the risk of payroll fraud in your business is to assign responsibility for different payroll duties to different people. For example, different employee members should ideally be responsible for capturing payroll data, for adding and removing employees, and for verifying the pay run and signing off the payroll. This gives you a clear audit trail, ensures a clear line of accountability, and puts strong checks and balances in place. In this sort of environment, someone should quickly pick it up when there’s something unexpected happening in the payroll.

2 Invest in automated solutions

A robust payroll solution will reduce the possibility of human error in or tampering with your payroll reducing opportunities for payroll fraud and enabling you to more easily provide accurate and timely information to SARS. Given the complex nature of payroll calculations today even in a small business, an automated payroll solutions is essential if you want to make sure that the figures are correct.

3 Bank account and ID number verification

In order to identify ghost employees, you need to follow a few steps when you pay a person on your payroll – to ensure that the person exists, that she is the person you wish to pay, that the bank account you will pay exists, and finally, that the bank account belongs to the person you intend to pay. A good payroll solution will feature online ID number and bank account verification to enable you to do just that.

When payments made do not match the budget, this can immediately raise a red flag, an investigation can take place and the fraud can be stopped – before more financial harm is done to the business.